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On a loan, or on a credit card application?

How long have you been working at your job? Is it a consistent paycheck or does it fluctuate? Does somebody in your immediate family have serious problems with credit?

Have you run your free credit reports to ensure nobody opened credit in your name and that's the reason you're being blocked?

I've been at my current job 1.5 years. The pay is consistent (salary). At the time I applied I had a worse job and wasn't there for as long. I have checked my credit and I had an avg score of 620 just before I started my current job (1 year ago) but I have had no revolving credit other than a car payment which got paid off last June.

I got reported on a loan I failed to repay in 2003, which I paid off in 2005.
 
Some more background on my situation:

I have a decent job so there's never a chance I won't have 250 in a pinch. But, this card, being for low/no credit folks like myself, has an $8/month fee. Obviously it's the only one I could get (I've applied for a few over the years) and I know the fee is not good, but how long should I keep this card before dumping it for one with no fee if I'm steadily charging 25-75$ per month and paying it off the next month?

CANCEL THE CARD

It is not worth the monthly fee. That goes double for with you have such a low credit limit. 250 limit with a monthly fee of 8 bucks is not worth it. The card is not worth $96 a year. Lets also add there are so many free credit cards out there that have no fee.

I know the hard part for quite a few people get getting that first card. After a short time with it seems it is easier to get that 2nd card or at least that is how a friend of mine struggled to get his first card after getting denied quite a few times. For me personally my ablity to get my first card was glitch by the fact that my Dad is the co signer while I was in college so I got his credit rating and backing on it,they also payed to bill as it was used for permission things only and so on. My first stand on my own card was an AMEX but like I said I had had a credit card for 2 years by that point.

Rule of thumb with a credit card. Always pay them off in fool so not to pay the nasty near 1% interest per month and never buy more than what you can afford.

Credit cards are great tools if used correctly. They allow you to not carry cash with you and avoid writing check and then move all monthly expensive to one bill which for some like me this make it easier for tracking monthly cost of living and how much one is spending a month. Lastly if you hit an emergency they are great for very quick liquid funds.

Best thing of course is have a healthy savings built up that you can pull on and not have to stress on where I am going to get going to get the money to cover X cost. Believe me it is nice because this month I already know I am spending more than I bring in. It was already tight before on the month because $700 airline tickets but some stuff with new glasses, contacts and then dental work put me over the top. I am pulling them money from savings to cover it but I know a lot of people who having that unexpected hit from the things other an airline would never be able to afford it. I have been at the point in school where I was trying to figure out where money was going to come from and thing had to find another 100 in funds.

Also do not carry a balance just pay off the card at the end of every month. Credit cards are honestly one of the worse ways to build credit and do not really use one to build it. Pay you bills off on time, get a car loan, ect are much better and quicker ways to build credit.
 
Ironically, if you allow a balance to carry for one month, and thus incur some interest, this will give you a better credit rating.
This is very inaccurate and no one who wants to build credit should do this.

The FICO score calculates consistency of payments and the current ratio of debt to credit. Carrying a balance on any card only weakens your credit; you get absolutely no benefit from it.

I've read advice on the Consumerist that says you should pay the minimum on the due date and then pay the remainder during the grace period.

Does this sound...sound?

I wouldn't do that. Pay the statement in full every time and you'll build some credit. Give it a while and don't apply for any other loans or cards in the mean time.
 
Max it out on a bunch of cool apple gear, macbook, iphone etc.
When you get your first bill call them up and say you have amnesia and you don't remember buying anything.
Go ahead ruin your credit. Your young, have some fun for now. You have your whole life ahead of you, to fix the mistakes you make now. :D

Or you could be smart and use it wisely. Don't make allot of little purchases with it. Buy one medium priced item or service. Something you could pay of in say 6 to 8 months. Try to keep this cycle up for 18 months or so. Buy something pay it off, buy something pay it off.

Then shop around for a low interest credit card company. When you find one apply. Also You can call your current credit card co. and tell them that your shopping around and if they can match or beat any of the other offers you have.
Good luck
 
carefully spend no more than you can pay back and it will build.

and be sure to pay everything you can by the end of the monthly billing cycle.

Actually, charging $250 a month, then paying $250 by the payment due isn't the best way to build credit. Charge $240 (just shy of the limit) and then pay the monthly requirement, plus about 10% more, each month until it's paid off. Credit companies don't necessarily look at how much you pay it's how regular you are in your payments, so you have to build a history of regular, timely payments for your credit score to go up.

m2c. After a year and half of doing this with a loan on my first car, I was approved for a credit card *first crack out of the box* for $6,000. I never use it though. Once you get started I think it would be waaay too easy to start charging stuff right and left. I keep it kind of like a rainy-day emergency-only thing.. On second thoughts, I should go ahead and cut it up.
 
Ironically, if you allow a balance to carry for one month, and thus incur some interest, this will give you a better credit rating. But, generally speaking, pay within the grace period (20-30 days depending on the card, pay attention to this) and you won't have to pay interest. A credit card is great, but be careful, running it up to the limit or opening additional cards is a great way to dig yourself a rather deep hole. So, use it only what you could pay off easily in a month.

I've heard and read this too.

It makes no difference whether or not you pay it all off at once; what matters is that you make (at least) the minimum payment, on time, every month.
 
I am 18 just got a Capital One Platium card with $300 Limit about 3 months ago. I used it on paypal to buy my brothers car parts and would put his money in my bank account and direct draw from the bank account to the card and pay it off. Which was about a $1000 worth of stuff.
Now that I have built credit, I have an A credit rating!!! and have $4400 in the bank.:D

I'm saving $5000 for this and getting a $2000 loan: Emmm Turbo charged AWD

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I currently drive this gas hog...

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lol gsx's are overrated. my brother has one and yea give me an alltrac any day haha
 
This is very inaccurate and no one who wants to build credit should do this.

The FICO score calculates consistency of payments and the current ratio of debt to credit. Carrying a balance on any card only weakens your credit; you get absolutely no benefit from it.

I wouldn't do that. Pay the statement in full every time and you'll build some credit. Give it a while and don't apply for any other loans or cards in the mean time.

Listen to the man. He knows whereof he speaks. This myth about building credit scores by carrying balances has been going around for years, and it hasn't been true for as long as I've known, if it ever was.

Here are some basic tips for credit card neophytes and here is a little more advanced reading about how credit works.

For what it's worth, I have been paying full balances as soon as possible every month for many years, and last time I bought a car my credit rating came out at 830. You don't "trick" your credit rating up by gaming the system. You use credit responsibly and it goes up by itself. That is the trick.
 
Ok, I don't work at a bank but being 52 with real estate assets etc, maybe I can give you some advice.

First and most important is that you stated that you are financially responsible. This is the most important aspect of it all, its you and not the card. The card doesn't go shopping by itself.

Now, you have to look at short term and long term credit goals. I assume that you are yoing and your initial goals might be to get a car. For a car purchase your credit history is important, but more so your perceived ability to make the car payments. Coming up wth a good down payment on a car with lower monthly payments will make the transaction approval easier for you. So paying off your car loan promptly is a sure-fire way of improving your credit credit history.

Getting more than one card with large credit limits is a VERY BAD IDEA. When creditors look at your file, they calculate what your possible indebtness could be based on all your credit limits. So if you have lots of cards with high limits and your income is not super high, watch out.

Another great way to get a good credit history at a much cheaper rate is to apply for a Line of Credit at your bank. You already have an account with them, so you are a known entity. These are typically offered at Prime Plus # with the # being how good your credit is. Nevertheless, their rates are WAY below those of credit cards.

For purchases of goods such as electronics etc. what I sometimes do is get the instore card that allows me to pay in 90 days. I do this, pay if off in full and then close that credit facility, making sure that the credit bureaus list that as satisfactorily completed. This way you show a history of several loans that were satifactorily managed.

Finally, many that posted here are right, that fee is too high given your credit limit. I pay the same fee for a card that is over 200 times that credit limit.

Good luck
 
I would cancel that card immediately. You should not be paying fees. You might try a Capital One card, I got one without any credit.
 
I agree, $8/mth is steep, especially when you only have a $250 limit.

Having moved to the US last year, and having literally no credit score (which causes some problems), I decided I needed to build some credit. As no-one would give me anything (not even a store or "gas" card), I ended up getting a secured credit card (through BoA). I paid them $300 (and maybe there was a small annual fee too, can't remember) and got a $300 limit. So really I was just borrowing against my deposit. Now, after about a year of paying back diligently, they've given me my money back and it's been upgraded to a standard card (with no annual fee).

It sucks as you are down $300 (or whatever amount you give them) until they finally "trust" you enough and give it back, but if you don't mind that, you are really only losing the opportunity cost on that $300 for a year (and at current savings interest rates, that's not much!), and that "one-time" annual fee. And you end up building some credit and getting a normal fee-free card after about a year.
 
....................
they finally "trust" you enough and give it back, but if you don't mind that, you are really only losing the opportunity cost on that $300 for a year (and at current savings interest rates, that's not much!), and that "one-time" annual fee. And you end up building some credit and getting a normal fee-free card after about a year.

cazlar
macrumors 6502

Join Date: Oct 2003
Location: Los Angeles, exiled from aussieland

So you should be, it could be worse, you could have had a lobtomy, a requirement of NZ visa's

Post a pic! :eek:
 
So the only times I'm late are those times that I forget exactly what day of the month my bill is due. Oddly enough, my bank sees fit to charge me interest even if I'm a day late--very strange, I know. I think it must have something to do with my original account being a student account; even though I've now switched to a different type of card with them, they are still happily pulling this little stunt with me. After I burnt myself once or twice by being a day late, I decided to set up automatic payments online. So I'm *never* late on the minimum payment and even if I occasionally forget about the day by which I should pay, I've paid all or most of the bill, or stupidly, sometimes a little extra (though the way the market is doing right now, paying a little extra isn't really making much difference in the one month lost investment potential).

So the point of that little rant was to say that you should set up automatic payments, as long as you know that there will be money in your account. That is, if you have a salary direct deposit into your account or you usually have a very comfortable amount of buffer money (I'd say, at least twice the amount of the auto payment) in there.
 
I've heard the 'carry a balance' advice multiple places. I'm not saying it's right but if it's not what is your suggestion?

you get your bill.....you pay it all

only charge a small percent of your total available credit (in your case $25 to $50 a month)

DON'T go over your limit

DON'T miss paying by the due date

and after 6 months or so, they'll increase your limit, your credit rating will go up and other banks will offer you better cards with better terms
 
Like some others have said do NOT carry a balance from month to month if at all possible. Doing so will just hurt your credit score.

The card you have seems like crap, with its low limit and monthly fee. The first card i got (back in october) was a Huntington Mastercard (obviously i use them for my banking also) and i got the max limit on that card ($800) and no fees on the first shot. Now i did have a history with apartment payments, utility payments (like gas and electric), etc. which helped to raise that limit, but your card still seems little craptastic.

And don't put to much on it. I usually do about $150 a month (2 tanks of gas - 60-70 apiece in my truck, and a dinner out with the girlfriend). Just take it easy, don't overspend, and pay the card off in full when the bill comes due.
 
Like some others have said do NOT carry a balance from month to month if at all possible. Doing so will just hurt your credit score.

The card you have seems like crap, with its low limit and monthly fee. The first card i got (back in october) was a Huntington Mastercard (obviously i use them for my banking also) and i got the max limit on that card ($800) and no fees on the first shot. Now i did have a history with apartment payments, utility payments (like gas and electric), etc. which helped to raise that limit, but your card still seems little craptastic.

And don't put to much on it. I usually do about $150 a month (2 tanks of gas - 60-70 apiece in my truck, and a dinner out with the girlfriend). Just take it easy, don't overspend, and pay the card off in full when the bill comes due.

wow that is so little to put on that card. My AMEX card with a $2000 credit limit I have been putting close to $1000 on it per month and the past few months had to make an early payment to free up some of the balance mind you I have had load some trips on there so that messed it up a little.

Mind you I have a feeling you are in college and it is not covering all your other living cost. My Credit card covers my food, gas, phone, and pretty much anything else I can route though it.

But besides that point I do pay it off every month and that really is the best way to used a credit card. PAY IT OFF every month. If one has trouble do that DO NOT put the more monthly fix cost on there like food and gas for ones car since that not going to change month to month and will just add to the monthly problems.
 
wow that is so little to put on that card. My AMEX card with a $2000 credit limit I have been putting close to $1000 on it per month and the past few months had to make an early payment to free up some of the balance mind you I have had load some trips on there so that messed it up a little.

Mind you I have a feeling you are in college and it is not covering all your other living cost. My Credit card covers my food, gas, phone, and pretty much anything else I can route though it.

But besides that point I do pay it off every month and that really is the best way to used a credit card. PAY IT OFF every month. If one has trouble do that DO NOT put the more monthly fix cost on there like food and gas for ones car since that not going to change month to month and will just add to the monthly problems.

You are correct, i am just a college student. Everything else (food, bills, etc.) usually comes straight out of the checking account using online bill pay; which by the way is the greatest thing ever invented. I don't know the last time i actually wrote a check.
 
Like people have been saying, the card you have is crap. My first credit card, I got when I was 18 and it had a $250 limit, but no fees. Using it for little random things (~$30-$40 a month) and paying off in full every month, my limit was raised in 3 months.
 
I was in your shoes a few years ago. As soon as I turned 18 I applied for a Citi MTVu card (student card, easy to get). 6 months later I got a Chase Freedom. A year after that I got an Amex Blue. And within the last week I just got a Discover More card and my score is at 797 at age 21. However, my limits are higher than yours because I make a good amount of money for a college student.

I use the 4 cards for different things where I earn rewards. I use them everywhere. I actually make money off of them. The key is to PAY IN FULL EVERY MONTH.

There are conflicting reports on how to build credit, but I have seen my score rise substantially in the 3 years that I have had credit by "PIF."

Go to citicards.com. Apply for the MTVu card, it's really not a bad card. You'll get 3 or 5 percent (not sure) back from restaurants, movies, etc. That way if you pay in full you're making money not paying 8 dollars a month, which is highway robbery by the way.

If you choose to keep a balance always look at utilization on the card. If you are at 250 right now keep it at 20% or so, so don't carry more than a 50 dollar balance and you won't lose some of your score.

The key is to be smart now and build it and when all of your friends are getting their first credit cards (as mine are now), you'll see their 28% interest rate and just laugh....because you're down to 8.99% or less after 3 years...
 
To answer some assumptions about my lifestyle, I am 25 so not super young, I'm not in school and I own my car (thanks to my decent salary)

One question that I always seem to wonder about is how much moving affects my credit score. I tallied it up the other day and I haven't lived at one address for more than 1 year since I was 17.

And I have been approved for this new card but it hasn't even been delivered yet so I can't cancel it for at least 3 or 4 months to at least build some history.
 
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